State proposes mother-lode mine fee

If New Mexico has its way, it will slap the state's biggest mine with an unprecedented tab. In June, state regulatory agencies presented Phelps Dodge with a draft plan to close out the old (1910) and large (fourth largest in the country) Chino Mine near Silver City. It could cost the company $759 million. The proposed figure includes measures to protect groundwater and prevent erosion, and would require a financial bond to ensure that taxpayers won't have to pay if the company defaults on the bill.

The estimate is within reach of a $986 million-dollar plan suggested by the local watchdog group, Gila Resources Information Project (GRIP). "With the ore running out, we have to think about the future, especially groundwater," says Harry Browne, executive director of GRIP.

Both estimates are a far cry from the company's $100 million plan. Richard Peterson, spokesman for Phelps Dodge, says the discrepancy in the estimates is caused by the state and GRIP's proposal for gentler waste rock slopes. That's a bad idea, Peterson says, not only because it's costly, but because it increases the surface area and the likelihood toxins will get into the air and water.

The state's proposal is simply a recommendation; it must negotiate an agreement with Phelps Dodge in time for a year-end deadline.